Ways to battle e-commerce giants

Online e-commerce giants have come to dominate the retail space in different countries all over the world, with one key value proposition – convenience. American online behemoth, Amazon, is said to have market capitalisation of $390bn, making it worth more than the top eight traditional brick-and-mortar retailers combined.

According to Forbes, Alibaba, a Chinese e-commerce company, saw a record $463bn of business transactions conducted on its retail platforms in the fiscal year through March 2016. Nigeria is not left out. Online businesses are estimated to be worth $10bn (about N3.06tn) in the country, according to a newspaper report.

The figures quoted above look quite daunting and intimidating for small businesses that are trying to compete in the same pool for customers. However, all hope is not lost and they can still get a piece of the pie. How can an emerging business or a brick-and-mortar shop wade off the onslaught by these large octopuses? It is difficult but not insurmountable, and it comes with opportunities to spring surprises.

The book “David and Goliath” by Malcolm Gladwell gives some incredible insight and a way out. It says, “The first is that much of what we consider valuable in our world arises out of these kinds of lopsided conflicts because the act of facing overwhelming odds produces greatness and beauty. And second, that we consistently get these kinds of conflicts wrong. We misread them. We misinterpret them.

“Giants are not what we think they are. The same qualities that appear to give them strength are often the sources of great weakness. And the fact of being an underdog can change people in ways that we often fail to appreciate; it can open doors and create opportunities and educate and enlighten and make possible what might otherwise have seemed unthinkable.”

The summary of the book is that it is dangerous to compete on Goliaths’ terms, which was why David declined to use Saul’s armoury to fight Goliath. The book actually makes us realise that David had the upper edge; he struck Goliath from afar with a stone. Goliath was a target too big to miss; once, he was able to get perspective and use one of his five smooth stones to hit the head of Goliath.

The perspective that is needed in this instance is that all businesses are first into customer experience, and the product or service they sell is secondary. Customers first buy into you before they buy the product or service you sell. Competing on price is a race to the bottom, especially when a smaller competitor does not have the power to take the impact like the bigger players.

The battle will be hard; however, it is doable and must be done consistently. I present to you the five stones you need:

Personal touch

Mention one personal or human connection you have with an e-commerce person apart from your device, bank account and internet connection (aside from the third party logistics delivery). Connecting with customers on a personal note can however be the distinguishing factor. As human beings, we are social creatures and we long for personal connections, which is why most people join different associations whether for religious or social purposes.

People crave the personal touch, the chit chat, the personalisation. Serious businesses that want to compete and win their customers over have to do away with transactional nature of relating with their customers and be more personable by engaging their customers more to ward off threats from e-commerce giants.

You cannot adopt a ‘transactional’ way of doing business like the e-commerce players and still want a piece of the action.

Chance to feel and touch

The nature of e-commerce is comparable to that of a marketplace; so it is almost impossible to fully guarantee 100 per cent quality of what is showcased. In short, what you see is not always what you get with online purchases. Looking through customer reviews of their purchases, a lot of complaints come up like late deliveries, inferior products, misleading descriptions and the likes. Online e-commerce, upon the first contact, can only leverage a maximum of two senses – sight (see the items) and hearing ( hear about the offers through radio, devices, TV or billboards).

However, the offline retail shop can leverage on the customer coming to their space and appeal to the customer using the five senses i.e the customer hears about the offer, sees the goods, has the opportunity to feel and touch, even smell and taste if the need be, depending on what is on offer. What the customer experiences with their five senses greatly impacts what they feel about the brand; this is one of the Achilles heels of the online companies that can easily be leveraged.

Online giants have the financial muscle and power to go into exclusive partnerships with major organisations i.e footwear and apparels, giving leverage to the producer on a larger market share. However, the smaller retailer can also produce their own high-quality items branded by them and exclusively sell in their stores.

Embrace the power of social media

Pull marketing is the way to go. Here, organisations embrace the power of social media to educate and enlighten the customer, relying on customer reviews, which help drive word-of-mouth sales. Social media should also be used as a means of engagement, interactions with customers and getting feedback to make customers feel more welcome and cultivate the relationship further.

Engage workers

Members of staff with deep product knowledge are essential – people who can act like personal shoppers to the customer and answer queries, just as it is done in a car or an electronic shop. The in-store experience is also very important in terms of the ambience of the store and the general shopping experience.

Invest in data and analytics

A small organisation that has a 360-degree view of a customer is not doing itself a favour; this information will help in getting a better view of the customer and proffer the right solutions. It is not just about getting data alone but converting it to actionable intelligence.

Never should an “underdog” battle a giant on its terms as it will be thoroughly spanked and outspent; it is impossible to compete with online giants in areas such as inventory, spending power, logistics, funding, and media power. However, leveraging the customer experience will help the organisation hold its own and create blue oceans of uncontested market space and thrive.

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